SFL - Earnings call transcript Q2 2024

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Sander Borgli

Welcome to SFL's Second Quarter 2024 Conference Call. My name is Sander Borgli, I'm Vice President for Investor Relations in SFL.

Our CEO, Ole Hjertaker, will start the call with an overview of the second quarter highlights. Then our Chief Operating Officer, Trym Sjolie, will comment on vessel performance matters; followed by our CFO, Aksel Olesen, to take us through the financials. The conference call will be concluded by opening up for questions, and I will explain the procedure to do so prior to the Q&A session.

presentation, will like the contain the our this note meaning begin U.S. call conference forward-looking we I to would that of Before statements within XXXX. Litigation Act Securities of Private Reform or Words similar these such statements. anticipates, as intends, forward-looking expressions intended to expects, are identify estimates

statements forth in to include, to future These risks forward-looking activities that different cause based guarantees limited and statements be expectations, those set actual and and offshore differ materially of that plans factors to to, future operations shipping, cause our uncertainties current and but not the results are are could credit are Forward-looking performance. on inherently of subject the from statements. Important not markets. and conditions results in are could

reliance to condition. Then our Please undue a and for may over highlights to forward-looking You direct discussion our the more Securities which on not on our and leave the Commission within risks operating should, Ole refer quarter. financial with for a the Hjertaker, of have second CEO, word I bearing Exchange will detailed place statements. filings uncertainties, these and therefore, results

Ole Hjertaker

you, Thank Sander.

recognized We company had now this a maritime unique a profile fleet. fees be announcing infrastructure car from built for quarter, dividend, effect will our as the have are and We from were flow charter full U.S. a Canada the lower newbuilds mobilization corresponding cash rigs diversified our with rules, XXnd carrier drilling costs where received but GAAP transit revenues partly third due accounting to and quarter. to in

in was million. scheduled flow EBITDA survey. We quarter, connection Linus in $XXX and cash out of the a reported We the million most periodic nearly service the had quarter $XXX also quarter this of approximately coincidentally revenues equivalent of with

per Capesize fuels net to cost line the $X.XX came $X.XX at and XX share in yield. the on million value positive quarter. a to in $XX income $X.X The And been EBITDA $X.X our million. around bulkers quarter the million share or we We contribution per has million relating dividend quarterly share. of shareholders, had profit X% in the Over paying savings of return around of with equivalent $XXX are a last months, to or in commitment dividend

dual-fuel asset backlog rate excludes billion, concentrated vessels very around have this vessels of the and new build propulsion. so of most we of Maersk, X expect our making backlog fixed the share operate our stands taken have another delivery and also it vessels continue with backlog like for the vessels Stolt-Nielsen. at Our October, portfolio, these dual-fuel importantly, seen take excludes operating vessels revenues this delivery strong the we future year, from the a figure are $X.X excludes relevant over the will short-term contribute the charters optionality, and last users. in approximately charters, and have, new long-term And us which And on of transformed significantly can model, profit completely Group Volkswagen chemical company's long-term trading and years, users is end end revenue pool have to by and large Vitol. market, to that on income. Most to And XX in X and we carrier also to net far

in charters. ordering on container the vessels, ships existing combination have extensions XX-year with of We through charter large massively recently, also to X added multiple the and backlog through

I we our flow over will word will Sjolie. per fuel in long-term share, Sjolie, the this talk with Trym raised distributable cash growth in give Operating to later. further weeks COO, a public Our ago. And Officer, million a to $XXX and about offering Chief build And few more order that, Trym

Trym Sjølie

shipping and XX vessels dry rigs Including assets our container of stands X assets maritime ships, $X.X portfolio, vessels, XX at up X delivered, bulk and is current made and our XX in managed fleet carriers. have Ole. we tankers, The XX drilling billion. owned to be you, backlog Thank from car

We first-class just mostly on have is charges. largest under of vessels our segment, Container the with chartered a charterers now assets long-term out XX% fleet backlog. to diversified of

We completely second the assets only users. In industrial bareboats bareboat from came time time the base XX% over or from charter all from charter of quarter, contracts, about and and leases operating X% company's have, model last to is dry years, large XX charters, customer majority the revenues of end transformed leases. from our the

fixed have cost to revenues, arrangements relating over had we've quarter. on contribution share have of on the XX as have rates the flow calendar day less profit In been to profit contracts X,XXX vessels charter charter Two X base dock dry-dockings. and dry the XX time and addition rate Out we fuel. bareboat contributed rig vessels container rigs, of In arrangements and defined rest and ships trading. In savings type charter QX, total had from spot both $X.X time, in we and and in significant to operating QX, on a off-hire days, cash million. technical,

in mobilization costs means Namibia to prospects from left overall quarter, the GAAP Canada from survey. July, are for for in this in of The in judgment, our rate Green $XXX operations higher considering in currently million was there expect from Subsequent due are is rigs. was end revenues charter went Hercules. costs and rig periodic in drilling which campaign XX fees in class in high to quarter the special against July. In the Therefore, SFL. accounting judgment million both Linus court record high rules, subject become case we period. challenging associated Our accordingly of mainly the mid-July. in drilling will to Canada the the from fleet XX-year QX, QX, and we of down Ace in and fleet amortized from mainly about to its has U.S. third reduced Allseas, spent XX.X and deferred was Due over mid-May was judgment. our dock revenue mid-May, in the be QX XX.X%, charter Hercules commenced across the third utilization X due The which revenues Allseas' dry-dockings. back to the for from materially drilling these mix. revenues SFL are quarter USD a guarantor steps. weeks on In made recovery Loadstar to administration, awarded second and next for favor survey than

performance as the our and existing Our as high increase to and grow service to in OpEx maintain philosophy a vessels of minimize with vessels. way relationship This fleet backlog cooperation invest off-hire, is investments making to includes Such customers. reducing consumption. investments well investing our to to our as continuously our optimize level carrying increase from to and energy capacity is cargo important charters a and

backlog cooperation with upgrades to performance our new this year, X-year on relationship large X vessels, and is which close of far increased for enhancements. we charters vessel So of the and a container Maersk have result

of placed These back have liner chartered also will a container out experience, on XX-year LNG XX,XXX be to the On ships charters five in time orders our we China. for dual-fuel ships recently container company. TEU leading

been from the scheduled already, first On month. and yard X the delivery the Hapag-Lloyd charters, upgraded container delivered this for third is ships the have

newbuildings LRX in side, delivered tanker China. first the Vitol X we of the from to have On the yard

time. about delivery for scheduled in is vessel second X-week The

through in ton We pool. aim the vessel us Aruba month delivery CFO, we tanker morning, to time the who for under X-year deadweight take now pleased delivery Olesen, further deployment will Stolt announce financial word of to of over Stolt the to our We SFL the end of that are have, this chemical just the taken sister also give quarter. tankers' XX,XXX take by the Aksel delivery an highlights the for the charter. I'll of to

Aksel Olesen

assets million has quarter. dry spot large energy also Thank that approximately with profit million revenues, ConocoPhillips On from this Norway $XXX approximately to to second $XX quarter, $X.X quarter, contract for $XX approximately container carriers, $XX forma profit fee X.X pro from million charter and our previous second coming charter This end X approximately in fleet approximately on on XXXX. the related assess X container long-term hire, of charter non-cash XX generated X compared including of is first of employed approximately vessels shown car items. in includes The Please assets. The charters $XX SFL contributed company's in quarter. In and net the which employed quarter. million approximately the in Golden of approximately million $XX vessels million $X.X and is savings second company to with in bulk million GAAP, fleet. approximately charter extraordinary short-term note tanker Linus U.S. not long-term quarter, in market this of out you, slide, fuel cash The compared the in only generated and million a in the a the our Capesize vessels generated second share share charter generated with million Trym. long-term flows our hire until gross in the of our under revenue are with quarter. generated line the in million hire, performance, The have on we the Ocean. previous of approximately to accordance hire generated is carrier charters. the during gross $XX in illustration guideline million with and contract X $X.X in to approximately

over the in rig $XX.X approximately and rig mid-July. contract first $XX.X on July with GAAP, underwent million on The million in and from the approximately XX-year accordingly lower Energia of in weeks. Hercules which Canada its in special rate quarter the SFL the mobilization recording rig finalized an repair in revenues additional the back survey. million with then During the quarter. amortized of in US the in compared an the million income cost revenues [indiscernible] Equinor previous after was and the compared the the and has deferred of and quarter, docking on recorded the course spent scope, $XX $XX.X contract costs fees mid-May, as to additional Hercules extended Galp second X at rig contract mobilization And a The contract. by quarter in are quarter. to mode, commenced Namibia half end of scope were

Our treatment the million $XXX the the previous the adjusted to the GAAP. approximately million just approximately mainly Hercules quarter compared compared an then as profit the to of as of accounting deferred EBITDA $XX costs per reported operating million first mentioned. U.S. and quarter, summarizes to G&A loss quarter. We statement operating due GAAP expenses was for U.S. in million $XX This in move the and $XXX on on to to

described accounting sales those as classified are in a different direct contracts, capital GAAP operating statements strategy business company. of from type, investment from excluded and a U.S. some This portion long-term of our in purposes. as our Therefore, assets, associates on previous leasing. focuses from are and traditional repayment our charter classified activities includes as calls, charter shipping revenues As accounting revenues entities And of investment earnings are financing leases in revenues. our parts for of leaseback

So for charter of which hire we received total the quarter, revenues, approximately than mentioned. GAAP, second to according of million U.S. just is approximately reasons less $XXX $XXX million, actually for operating report

share our Capesize car carrier, During some fuel the recorded company to on the million charter large of profit of our $X.X X from on savings vessels, income our vessels, Golden quarter, Ocean. approximately container

quarter our our previously revenue during first the expenses mentioned. revenues from the lower reasons line from assets vessels with was energy and quarter. were Our in operating Both for

$XX per profit share the $X.XX and in per overall, million share the quarter. or to compared according million net $XX.X previous reported company a U.S. of So approximately or GAAP, to approximately $X.XX

sheet. Moving approximately and had the on quarter At end, cash million $XXX balance equivalents. of SFL to cash

the long-term the the maturity JOLCO arranged and company container $XX previously Maersk debt-free terms for charter. During at million Phuket attractive matching very financing quarter,

senior tankers In million approximately quarter. total of recently CapEx are delivered. to Two acquired The third the have three will of $XXX we have bank be million, which terms approximately financed already of with be expected vessels fourth and during been commitments, CapEx vessels delivered of remaining X with financing. a $XXX this

finally, Due TEU million. repair approximately environment its approximately XX-year harsh net jack-up increased $XX for an an from our rig scope, total over combined equity commitments underwent post-delivery and profits expenditure public months. estimated has vessels million the recently maturing billion. vessel covering secured Furthermore, of company capital financing approximately offering the in financings. addition, $XXX for financing debt approximately XX,XXX a remaining million. Subsequent to approximately million, by SFL recently July. had cash expected $X.XX Based more shares at quarter scheduled cash dividend SPS, a X%. end, at scope approximately raised $XX XXnd $XX to build by in commitments delivery cost a The secure net amount combination the XX a And next conventional funded million aggregate hassles construction pre- effectively XXXX company the entered company of from conclude, U.S. with of $XXX QX hand approximately XX%. Then dividend five into agreements has to a numbers, the the consecutive are represents and of $X common to share, $X to be of declared yield an book additional a of on the board CapEx which issuing in the of Linus million In per of and container ratio

this Following recent billion, we backlog forward. visibility rate and strong providing a strong charter charter The on and with stands company than billion position, recently to renewals, cash have and on has liquidity and $X.X our acquisitions. And new secured $XXX raised and in to flow financing proceeds balance investments our in the refinancing vessels fixed million us address gross we at existing currently going sheet session. presentation, of of conclude move secured offering, a with year the Q&A in more senior public $X that,

Sander Borgli

you, We our Thank have Aksel. Elmaghrabi. Sherif [Operator first question Instructions] from will

Sherif Elmaghrabi

the their offshore the space, focused the say of end Hercules, its own is existing still rig operators becoming within would consolidation in at on closer the little a the first -- given moment? backlog you And are bit now recent more that within they're to on getting contracts. interested rig or So,

Ole Hjertaker

a The find made for Equinor working there, rig now good Canada big Namibia is job for in Galp. doing in a really

these for clearly there's this assets. are but rigs So specialized market decent of caliber, a

It the to in it, the rig wants Equinor expected The efficiency is from work quarter. and both scope depends during Canada. charter of off follow-on rig. any concluded sometime come fourth to not all have on, the do work the We that call drilling

make are in oil so concluded that something charters, but we cannot in on comments until not have any far, various place. and have specific So dialog anything companies with you and potential

charters focus, we In on which not and semi-submersibles, consolidation terms the with of is. drill closely, on think, M&A, primary what listed assets particularly quite edging rates type has of Hercules companies are But see have few for ultra-deepwater some and the been months. units, strong the more ships that a and much seen course, we, seen have it that up, relating charter and to over would I following last is we charter of rates so

when we announce But the the in will for be long-term a yet. cannot this new we believe still in So strongly Hercules story quite charter segment. we'll -- on specific we

Sander Borgli

[Operator everyone Instructions] I no are the As from in there further audience, conference participating for questions would like call. thank this to

questions details follow-up contact any the through www.sflcorp.com. management, us page, have our web you are pages press on you Thank there can get with in touch If the to in contact or the you. release

SFL (SFL) 14 Aug 242024 Q2 Earnings call transcript